In February, Michael Piwowar, the acting chairman of the SEC, directed the staff to consider the need for changes in the Dodd-Frank rule requiring companies to disclose the ratio of the median of the annual total compensation of all employees to the annual total compensation of the chief executive officer.

The SEC implemented its rule in 2015 but ordered compliance delayed. The first disclosures will be made in an issuer’s 2018 proxy materials and will cover compensation paid in 2017. Piwowar’s charge to the staff is an aggressive move, considering only two SEC commissioners out of a possible five are in place. That said, Piwowar and Kara Stein, the other sitting commissioner, apparently have the authority to change the rule if they decide to do so because, under federal law, two commissioners are a quorum.

Stein supports the rule, so, in effect, Piwowar can suspend implementation or make changes only after a third commissioner arrives, presumably one who supports his position, which is likely. That third person is likely to be Jay Clayton, whom President Trump has nominated to chair the SEC.

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